State turns magpie in pinching houses from under noses of first-time buyers

THE State has ramped up its purchase of private houses, in a move that is crowding firsttime buyers out of the housing market.

Local authorities and Government-funded housing associations have stepped up their purchase of new homes as the construction of social housing continues to fall.

Some councils built no social housing last year. This put huge pressure on the private sector to deliver housing.

The State and Government-funded bodies accounted for one in three house purchases last year. This is more than the previous year, according to figures extracted from Department of Housing data.

The analysis was done by Technological University Dublin housing lecturer Lorcan Sirr and leading architect Mel Reynolds. Dr Sirr dubbed the State’s actions as akin to that of a magpie – a bird that is notorious for taking things off others.

The pressure on new buyers during the pandemic means banks are scaling back the size and number of mortgages they will issue, while new buyers are already competing with cuckoo funds.

Institutional funds snapped up the majority of apartments in the country in last year.

Now it has emerged that local authorities only built around 1,000 houses last year, down on the previous year.

Local authorities and State-fund approved housing associations bought four times this number.

The State is typically competing against first-time buyers at the same price points. This is despite the fact housing experts claim county councils could build homes cheaper.

The four Dublin local authorities have seen their house building output collapse by almost a third.

Eleven councils built fewer houses last year than the previous year. Roscommon, Tipperary and Westmeath built no houses. Laois built just one.

And the number of newly built houses supplied by approved housing bodies also fell last year.

Housing Minister Eoghan Murphy said recently that there was a 51pc increase in the number of new social housing units delivered last year.

But this was mainly due to the surge in purchases from private developers.

These new houses are known as ‘turnkey’ houses, when the State buys new housing from a developer before it hits the market.

Local authorities and housing bodies bought just short of 4,000 housing units between them. This accounts for almost 30pc of new estate houses and apartments bought last year.

The figures exclude oneoff housing, and Part V and council-built social housing.

Dr Sirr said: “This can hardly be good for local politicians whose younger constituents see what is usually more affordable housing bought by their council to house social tenants.”

Mr Murphy said the notion that ‘turnkeys’ are homes that are completed and the State simply buys the keys is untrue.

He said the term is misleading. In many cases the local authority is involved from the start and the houses would not be built without the involvement of the local authority.

“There are areas where a local authority may not have land in places suitable for social homes and turnkeys offer a good solution in this scenario.

“These homes are not being bought in a shrunken market – they are directly expanding the market because they are new homes built by and for the local authority/approved housed bodies,” the minister said.